WINTER STORM CONTINUES TO WREAK HAVOC; CENTER

C O N F I D E N T I A L SECTION 01 OF 04 BEIJING 000390

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/01/2033
TAGS: PGOV PROP ECON ELTN SOCI CH
SUBJECT: WINTER STORM CONTINUES TO WREAK HAVOC; CENTER
FOCUSES ON ENERGY AND TRANSPORTATION; MORE SNOW PREDICTED

REF: A. BEIJING 386


B. BEIJING 335

C. GUANGZHOU 62 AND PREVIOUS

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Classified By: Political Internal Unit Chief
Dan Kritenbrink. Reasons 1.4 (b) and (d).

Summary
--------------


1. (C) China's worst snowstorm in 50 years continues to wreak
havoc across southern and central parts of the country.
Although some transportation networks over the past two days
have started to return to normal, hundreds of thousands of
travelers remain stranded and millions of residents face
hardships caused by blackouts and energy shortages.
Meanwhile, the weather refuses to cooperate: China's
National Meteorological Center issued an "orange alert" on
February 1, predicting medium-to-heavy snow throughout much
of the disaster areas. PRC leaders have emphasized ensuring
energy supplies and restoring transportation networks, with
President Hu Jintao visiting coal mines in Shanxi Province
and a coal-related port in Hebei Province on January 31. The
State Council held a special press conference February 1,
during which officials praised the Government's hard work and
"strong and timely measures." China's propaganda apparatus
has told reporters not to dwell on deficiencies in the
Government's response but instead focus on positive,
forward-looking coverage. Regarding the storm's economic
impact, a top government statistician said its effect should
be short-term in nature but that the storms would likely
prompt the Government to review the adequacy of its
infrastructure and its capacity to monitor major disasters.
Damage to the winter wheat crop and rapid increases in
produce prices have prompted speculation that inflation,
presently the Government's top economic concern, will hover
at 11-year highs for longer than expected. End Summary.

State Council Holds Special Press Conference
--------------


2. (U) As PRC authorities continue to grapple with the havoc
caused in southern and central China by the worst snowstorm
to hit the country in 50 years, the State Council Information
Office (SCIO) convened a special press conference on the
afternoon of February 1 to review the storm's impact and
describe the government's relief efforts. Representatives
from the National Development and Reform Commission (NDRC),
Ministry of Civil Affairs, Ministry of Railways, Ministry of
Communication and the General Administration of Civil
Aviation of China (CAAC) spoke at the event. Officials
stated that the abnormal weather has affected 19 provinces,
with Hunan, Hubei, Guangxi, Jiangxi and Anhui having been hit
the hardest. By January 31, the storms had caused RMB 53.7
billion in economic losses, 60 deaths and the evacuation of
1.75 million people. In response to questions from domestic
and overseas journalists, officials denied that preparations
for the disaster and subsequent relief work had been too slow
or insufficient. The officials praised the hard work and
"strong, timely measures" of Government departments on all
levels and expressed confidence that life will soon return to
normal and China's "rapid economic growth will continue."
Deputy Director of the NDRC Bureau of Economic Operations Zhu
Hongren said the Government had established a "command
center" under the NDRC's guidance that is coordinating
official relief efforts.

More Bad Weather Forecasted
--------------


3. (C) The weather continues to make efforts to respond to
the snow disaster more difficult: China's National
Meteorological Center (NMC) on February 1 issued an "Orange
Alert," predicting medium-to-heavy snows for today in various
areas of Guizhou, Hubei, Anhui, Jiangsu, Zhejiang, Jiangxi,
Sichuan and Yunnan Provinces. In addition, the NMC warned of
freezing rain in parts of Guizhou, Hunan and Jiangxi. The
Center also issued guidance for the public to avoid
unnecessary outdoor travel and to shore up temporary
structures vulnerable to collapse. (Note: Construction
workers in China typically live on job sites in
pre-fabricated, temporary dwellings that frequently collapse,
even without the added weight of snow.)

"Transport Networks Returning to Normal"
--------------


4. (U) Though transportation networks have been affected most
by the storms, the NDRC announced on February 1 that some
progress was being made in returning at least some networks
to normal, even as serious problems remained. According to

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an NDRC statement carried by Xinhua, the Jing-Zhu Highway (a
primary artery from Beijing to Zhuhai in Guangdong Province)
was no longer blocked but some sections remained extremely
jammed. The NDRC said that as of Thursday evening, 12,990
vehicles on the highway carrying 54,376 passengers were still
"held up" in traffic. The NDRC release said railway officials
were moving diesel engines onto areas of the
Beijing-Guangzhou line to pull trains in sections where
electricity remained out. The NDRC reported that air travel
was returning to "normal," though 135 flights were cancelled
January 30-31 and over 900 were delayed. About 22,000
passengers remain stranded in airports, 6,100 in Hunan
Province airports alone. According to the Xinhua News Agency
Website, on Thursday, eight medium and small sized airports
remained closed and 900 flights experienced delays.

"The Coal is Getting Through": Hu Jintao Visits Miners
-------------- --------------


5. (U) The personal intervention of top leaders to ensure
energy supplies was another focal point of official media on
February 1. Chinese newspapers gave heavy coverage to
President Hu Jintao's visit January 31 to coal mines in
Datong, Shanxi Province, and to Qinhuangdao Port in Hebei
Province, though which much coal is shipped. The People's
Daily reported Hu's trip under the headline "Work Together to
Win a Full-Fledged Victory on Countering Disaster." China's
media February 1 also devoted extensive coverage to Premier
Wen Jiabao's speech to a national conference on safeguarding
supplies of power, coal, and oil. One Xinhua release
reported that coal shipments on the Beijing-Hangzhou Grand
Canal have doubled since January 25. Coal barges are also
getting preferential treatment at locks and other choke
points along waterways. Meanwhile, Xinhua News Agency
reported the People's Liberation Army Air Force has devoted
four IL-76 transport aircraft to the relief efforts.

"Media Should Not Dwell on Past Mistakes"
--------------


6. (C) Reflecting the center's desire to carefully manage
press coverage of the disaster, Zhou Qing'an (strictly
protect),a journalism professor at Tsinghua University and
an editorial writer for the Xinjing Bao (Beijing News)
newspaper, told PolOff February 1 that the Communist Party
Propaganda Department issued a directive that media cannot
"reflect" (fansi) upon past events leading up to the
disaster, but instead must give positive, forward-looking
coverage of the current Government response. Still, the
media can get away with criticizing local governments, i.e.,
those below the provincial level, for poor crisis management.
Zhou penned an editorial in the January 31 edition of
Xinjing Bao praising the efforts of the many ordinary
citizens who have provided help to stranded travelers while
criticizing the profiteering that had occurred in a "small
number" of areas. Some shop owners in areas with many
stranded travelers, Zhou wrote, were charging as much as RMB
50 (USD 7) for a package of instant noodles (an item that
normally costs around RMB 3). On February 1, the Xinjing Bao
ran another editorial (not penned by Zhou) calling on China
Central Television, government monopolies like oil-giant
Sinopec and rich Chinese to do more to raise money for
disaster relief.

"Domestic Media Does Not Have Ful Picture"
--------------


7. (C) Zhou further commented that China's own media does not
have a complete grasp of the story due to the extreme
difficulties of traveling to and reporting from the disaster
areas. Xinjing Bao has dispatched 10 reporters to Guizhou
and Hunan Provinces, but most are themselves stuck in the
transport gridlock and unable to file stories. One Xinjing
Bao journalist who made it to Guizhou, Zhou said, has had to
file his story over the phone due to the lack of electricity
there.

"Three Days Without Food"
--------------


8. (U) Despite the prevalence of positive reporting, some
newspapers still ran less-than-rosy accounts of the disaster.
The Nanfang Dushi Bao (Southern Metropolis) carried a story
February 1 of a bus that has been stuck in traffic on the
Jing-Zhu Highway since January 25. The paper quoted the bus
driver as saying the passengers had gone without food for
three days. As of mid-day January 31, the paper reported,
the bus had been diverted to a secondary road and the driver
was looking for a town where the passengers could get food.
Some buses on the Jing-Zhu have been stranded for up to eight
days, the story said.

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9. (SBU) International criticism of China's slow official
response is leaking back into the country. The Global Times,
one of several papers in China consisting almost entirely of
translated foreign news articles, ran stories February 1 from
the U.S. and South Korean press commenting on how the storm
reveals China's economic vulnerabilities and that the Chinese
government initially showed a lack of concern over the
snowstorms.

From ConGen Chengdu: Guizhou Braces For More Snow
-------------- --------------


10. (SBU) One of the areas hardest hit by the storm is
Guizhou, China's poorest province. A Guizhou Foreign Affairs
Office official told Chengdu ConGenOff February 1 that the
weather in Guizhou is getting "better," but the overall
situation remains "serious." Expressways are open to
limited, low-speed transportation, he said, and widespread
areas of the Province, including parts of Guiyang City, are
still experiencing power outages. Local press reports reveal
concern, especially in southeast Qian Prefecture, that more
bad weather is on the way. Market prices for food in Kaili
and Qian Prefecture, according to local media, are up as much
as 100 percent. Qian Prefecture badly needs additional food
supplies and candles, press reports said. (Note: One concern
in Guizhou is that many remote mountain villages, populated
largely by the elderly and young children as most working-age
people have migrated to the cities, have been cut off for
days now without power. Demonstrating the seriousness of the
situation, one local official was quoted in regional media as
saying these villages will have to hold out by relying on
"traditional hunting skills." End note.)

Storms Reveal Weak Infrastructure
--------------


11. (C) As for the economic impact of the storms, National
Bureau of Statistics Director General of the Department of
Comprehensive Statistics Li Xiaochao commented to EconOff
February 1 that the effect of the snowstorms on economic
performance is likely to be short-term in nature. He
suggested, however, that China needs a better system for
assessing damage and informing policy decisions when
disasters strike. He compared the snowstorms to the 2003
SARS outbreak, noting that officials learned from weaknesses
exposed in the Government's response to launch reforms in the
public health system. Li predicted the storms would prompt
the Chinese Government to review the adequacy of its
infrastructure and its capacity to monitor and evaluate
conditions when challenged by an event of this magnitude.
Other economists have suggested the storms will prompt China
to invest further in transportation and power transmission
infrastructure and that this could help offset economic
slowing caused by an anticipated downturn in developed
country export markets.

Food Inflation Troublesome
--------------


12. (SBU) There is growing concern that the snowstorms will
further drive up inflation, the government's top economic
concern, just as the National People's Congress (NPC)
prepares to convene March 5. The consumer price index,
primary driven by pork and cooking oil price increases, has
been running above six percent since last August and has on
two occasions hit 11-year highs. Two of our economist
contacts have already warned that the January data will very
possibly exceed seven percent, creating headlines chronicling
yet another mini-record in the weeks before the NPC.
Depending on the scale of the crop damage due the snowstorms
and the duration of food/goods distribution problems, food
prices may continue their upward climb. State media has
reported vegetable prices up more than 50 percent in 11
provinces and up 100 percent in some areas.


13. (SBU) Royal Bank of Scotland China Economist Ben
Simpfendorfer pointed out in a February 1 research note that
grain prices have recently started rising, adding another
element to food inflation. Apparent storm damage to the
winter wheat crop (85 percent of wheat production) would
exacerbate this trend, he noted. Seemingly mindful of these
concerns, Chen Xiwen, director of the Office of the Central
Leading Group on Rural Work, told media January 31 that
although there has been a "catastrophic" impact on fresh
vegetables and fruits in some areas, inflation should come in
around 6.5 percent for January.

Beijing West Station Calm, Lots of Tickets To Spare
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14. (SBU) Although the situation elsewhere in China remains
serious, the impact of the storm remains hard to detect in
sunny Beijing. PolOff visited Beijing's West Station, the
starting point for many south-bound trains, January 31. The
station was calm and not crowded, though the People's Armed
Police presence was greater than at the main Beijing train
station the day before (ref B). A migrant from Henan
Province told PolOff he had four relatives stuck in Guangzhou
unable to purchase tickets to Henan. The man noted
pessimistically that more snow was still expected. Two other
migrants, however, from Hubei and Hunan Provinces,
respectively, commented that train tickets, usually
impossibly scarce the week prior to the Chinese New Year
holiday, are now readily available, apparently because so
many travelers have cancelled plans to head south. The same
was not true, however, for bus tickets. PolFSN contacted
Beijing's main bus station January 31 and was told all buses
to Wuhan, Hubei Province are suspended until further notice.
RANDT